As the talk of a state lottery continues to swell in Raleigh, Shawn Anderson frets about his gambling business in Greensboro.
Anderson is a distributor of video poker machines, and he runs the Bingo Nuts hall six days a week. If customers get tired of eyeing bingo cards, they can play three video poker machines along the back wall.
The payouts are small -- no more than $10 in merchandise on a video poker machine or $10 on a bingo game -- so Anderson wonders how many people will show up if the state approves a lottery with much bigger payouts.
"You're looking at a million dollars or more on the lottery, so I'm pretty sure it will hurt," he said.
North Carolina may be behind other states in legalized gambling, but it is home to a casino in the western reaches of the state operated by the Eastern Band of the Cherokee; roughly 10,000 video poker machines scattered across clubs, convenience stores and arcades; and more than 300 bingo operations that can offer as much as $500 in prizes.
Such private gambling interests are paying attention to the lottery debate. Lobbyists for the Cherokees and the video poker industry have been showing up at meetings in the General Assembly to see how lottery legislation may affect their clients.
Experts say a lottery is likely to cut into their profits.
A lottery can shave 10 percent off the revenue that casinos and race tracks make, said I. Nelson Rose, a law professor at Whittier Law School in California, who has written several books about the gambling industry. If lawmakers adopted instant-winner video games such as Keno that aren't much different from sitting in front of a slot machine, he said, the lottery could cut even deeper into competitors' revenue.
"The natural progression with all forms of gambling is to get faster, with bigger jackpots and at least the illusion of player [skill]," Rose said.
Gambling businesses often fight states' attempts to start lotteries. Racetracks fought lotteries in many states, and casinos have successfully kept lotteries out of Nevada, Alabama and Mississippi. In Alabama, casinos in neighboring Mississippi funded church groups fighting to keep a lottery out.
'Staying quiet'
But private gaming interests in North Carolina are not fighting a state lottery.
"We're staying quiet about that," said Joyce Dugan, a spokeswoman for the casino, which is run by Harrah's.
She said roughly two-thirds of the casino's visitors are from out of state, with nearly 25 percent hailing from Georgia.
Several bingo hall operators say their players will still show up because it's a cheap way to have fun.
"I've been to a lot of other states, and a lottery hasn't affected bingo at all," said Bud Tremblay, a past commander of the Veterans of Foreign Wars post in Sanford who oversees the post's weekly bingo night. Because the game raises money for the VFW, a charitable organization, it can offer jackpots of as much as $500. "You've got regular bingo players out there. They come every week; they love to play bingo. I can't see them giving it up."
But at Bingo Nuts, Anderson worries that lawmakers might not wait for the marketplace to sort out winners and losers in the gaming business. They may decide to eliminate one competitor by banning video poker machines.
Some lawmakers in South Carolina talked about getting rid of video poker as they pushed for a lottery five years ago, though a state court ended the debate by ruling video poker unconstitutional. When those machines started moving into Georgia, a lottery state, lawmakers there banned video poker.
North Carolina lawmakers have not linked the lottery's creation with a video poker ban. A lottery bill that narrowly passed the House early this month includes language that some senators say strengthens video poker's right to exist.
House Speaker Jim Black, a Mecklenburg County Democrat, said he still supports the right of video poker businesses to operate. Senate Majority Leader Tony Rand, a Fayetteville Democrat who is heading the Senate's lottery committee, supports banning video poker. But Rand said he will not use the lottery to force a ban through the House.
Last week, a Senate committee approved legislation banning video poker. That sets up another vote before the full Senate, which has repeatedly banned video poker. But such a ban has failed to reach the floor of the House, where Black has pushed for tougher regulation of the machines instead.
The state's sheriffs and the N.C. Division of Alcohol Law Enforcement favor a ban on the machines because many have been reconfigured to offer illegal cash payouts. They say it is hard to prevent illegal gambling generated by the machines.
Some are baffled that the state could advocate one form of gambling while trying to kill another. Sen. Richard Stevens, a Raleigh Republican, pointed to language in the video poker ban legislation that says, "Whereas, the State of North Carolina desires to clearly set forth its policy against commercial forms of gaming."
Rose, the California law professor, said it's more likely that the state would get into the video poker business, as West Virginia and Oregon have done.
"You don't start a state lottery to fight video poker," he said. "If you want to fight video poker, you legalize the same game but only if it's run by the state."
(Staff writer J. Andrew Curliss contributed to this report.)
